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Nifty likely to face resistance at 22,300
Bulls staged a strong comeback after a day of a bear attack, but the uptrend needs to be sustainable and hence only a strong and consistent close above the 22,200-22,300 area can give an upward direction to the Nifty 50 towards 22,500-22,600 levels, till then 21,900-21,860 may act as a support to the index as breaking the same key support can increase the possibility of a sharp downward move, experts said.
On March 14, the BSE Sensex rallied 335 points to 73,097, while the Nifty 50 jumped 149 points to 22,147 and formed a bullish candlestick pattern on the daily charts while defending 21,860, the key level for breaking down the higher highs, higher lows formation.
"Despite the resurgence of speculative activity, caution is advised as the market still appears to be in uncertain territory. It's important to observe the weekly close in the upcoming session to confirm the trend," Rajesh Bhosale, technical analyst at Angel One said.
He feels if the Nifty continues to face resistance around the 22,200-22,300 zone, which marks a breakdown level and a 61.8 percent retracement of the recent decline, the index might see a return of weakness in the following week. "In such a scenario, Nifty could revisit the 21,900 - 21,850 zone, which corresponds to significant swings on the hourly chart and coincides with the 50EMA on the daily chart. Below these levels, there could be another wave of intense selling."
Currently, the immediate trading range is between 21,850 and 22,300, he said.
Ruchit Jain, lead research at 5paisa.com also feels as of now, it is difficult to assess whether the worst is over just based on one day's upmove. Hence, follow-up moves will be important to see and thus he advised traders to stay cautious and prefer a stock-specific approach.
The broader markets also rebounded after a sharp cut in the previous session. The Nifty Midcap 100 and Smallcap 100 indices gained 2.15 percent and 3.5 percent, respectively.
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Key support and resistance levels on Nifty
The pivot point calculator indicates that the Nifty 50 is likely to take immediate support at 21,980, followed by 21,912 and 21,802. On the higher side, the index may face resistance at 22,173, followed by 22,267 and 22,377 levels.
On March 14, the Bank Nifty remained under pressure for the fifth consecutive session, falling 191 points to 46,790 and forming a High Wave or Doji kind of candlestick pattern on the daily charts, indicating indecisiveness among buyers and sellers about future market trends. The pattern also suggests that there can be a possibility of trend reversal with resistance at the 47,000 mark, experts said.
Bank Nifty held on to the 40-day average (46,700) and the 61.82 percent Fibonacci retracement level (46,616) and managed to close above that. "We believe that the selling pressure is being absorbed and we expect a recovery over the next few trading sessions in the case of Bank Nifty as well," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
In terms of levels, 46,600-46,500 is the crucial support while 47,200-47,300 is the immediate hurdle, he feels.
As per the pivot point calculator, Bank Nifty is expected to take support at 46,608, followed by 46,451 and 46,196. On the higher side, the index may see resistance at 46,851 followed by 47,274 and 47,528.
As per the weekly options data, the 22,200 strike owned the maximum Call open interest with 1.59 crore contracts, which can act as a key resistance level for the Nifty in the short term. It was followed by the 22,500 strike, which had 1.17 crore contracts, while the 22,300 strike had 1.12 crore contracts.
Meaningful Call writing was seen only at the 22,200 strike, which added 71.19 lakh contracts.
The maximum Call unwinding was at the 23,000 strike, which shed 51.62 lakh contracts, followed by the 22,000 and 22,900 strikes, which shed 46.75 lakh and 36.67 lakh contracts.
On the Put side, the maximum open interest was seen at 22,100 strike, which can act as a key support level for the Nifty with 1.57 crore contracts. It was followed by the 22,000 strike comprising 1.34 crore contracts and then at the 21,900 strike with 87.17 lakh contracts.
Meaningful Put writing was at the 22,100 strike, which added 1.29 crore contracts followed by the 22,000 strike and 21,900 strike, which added 82.59 lakh and 39.35 lakh contracts.
Put unwinding was seen at 21,700 strike, which shed 18.08 lakh contracts, followed by 22,400 and 22,300 strikes, which shed 10.25 lakh and 10.03 lakh contracts, respectively.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. Marico, Dabur India, Godrej Consumer Products, Syngene International, and Atul saw the highest delivery among the F&O stocks.
A long build-up was seen in 69 stocks, which included MCX India, REC, BHEL, Bharat Electronics, and Apollo Hospitals Enterprises. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, 6 stocks saw long unwinding. These include RBL Bank, Balkrishna Industries, Godrej Properties, Bajaj Finance, and IndusInd Bank. A decline in OI and price indicates long unwinding.
14 stocks see a short build-up
A short build-up was seen in 14 stocks, including NMDC, Shriram Finance, Axis Bank, Tata Motors, and Tata Steel. An increase in OI along with a fall in price points to a build-up of short positions.
96 stocks see a short covering
Based on the OI percentage, total 96 stocks were on the short-covering list. These included Atul, Sun Pharmaceutical Industries, Mphasis, Hindustan Copper, and Hindalco Industries. A decrease in OI along with a price increase is an indication of short-covering.
The Nifty Put Call ratio (PCR), which indicates the mood of the equity market, jumped to 1.12 on March 14, from 0.65 in the previous session. Above 1 PCR indicates that the trading volume of Put options is more than Call options, which generally suggests gradual increase in bearish market trend ahead.
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Stocks in the news
Wipro: The technology services and consulting company has entered into agreement with Desjardins to modernize consumer banking services using its NetOxygen Platform. The solution will improve Desjardins’ consumer lending and credit card business.
One97 Communications: The National Payments Corporation of India (NPCI) has granted approval to One97 Communications, Paytm's parent entity, to participate in UPI services as a Third-Party Application Provider (TPAP) under multi-bank model. Under the new model, Paytm will now provide the payment service in partnership with four new banks--Axis Bank, HDFC Bank, State Bank of India, Yes Bank--who will act as its payment system provider (PSP).
RailTel Corporation of India: The company has received the work order from Odisha Computer Application Centre (OCAC) amounting to Rs 113.46 crore.
Biocon: Indranil Sen has resigned as Chief Financial Officer of the company with effect from March 15. He resigned as CFO to pursue opportunities outside the organization.
Eris Lifesciences: The pharma company has received approval from the board of directors for its agreement to acquire 19 percent equity stake in Swiss Parenterals from the promoters of the company, for Rs 237.50 crore.
Funds Flow (Rs crore)
Foreign institutional investors (FIIs) net sold shares worth Rs 1,356.29 crore, while domestic institutional investors (DIIs) purchased Rs 139.47 crore worth of stocks on March 14, provisional data from the NSE showed.
Stock under F&O ban on NSE
The NSE has added BHEL to the F&O ban list for March 15, while retaining Aditya Birla Fashion & Retail, Manappuram Finance, National Aluminium Company, Piramal Enterprises, RBL Bank, SAIL, Tata Chemicals and Zee Entertainment Enterprises on the said list. Hindustan Copper was removed from the said ban list.
Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
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